The Gross Law Firm notifies investors that a class action has commenced in the United States District Court for the Eastern District of Wisconsin on behalf of shareholders of A. O. Smith Corporation who purchased shares between July 26, 2016 and May 16, 2019.
The filed complaint alleges that defendants made materially false and/or misleading statements and/or failed to disclose that: (a) A.O. Smith had undisclosed business connections and entanglements with UTP through which it funneled up to 75% of its China product sales; (b) A.O. Smith had used UTP to engage in channel stuffing by artificially inflating inventories purportedly sold through distributors that were not based on consumer demand, thereby approximately doubling the normal level of inventory at such distributors; (c) A.O. Smith had used its UTP relationship to artificially inflate the sales figures it reported to investors by as much as 8% and to conceal worsening sales trends that the Company was experiencing in China; (d) A.O. Smith’s sales growth had been primarily in lower margin products as its higher priced products were being undercut by competition in “second-tier” Chinese cities, causing the Company to experience significant margin pressures; (e) A.O. Smith had increased its cash reserves in China to over $530 million in furtherance of its channel stuffing and sales manipulation scheme, encumbering the Company’s ability to repatriate the cash or use it for capital expenditures; and (f) as a result of (a)-(e) above, A.O. Smith’s business, operations, and prospects were significantly worse than publicly represented and the Company was poised for sales and earnings declines in China, its most important international market.
If you wish to choose counsel to represent you and the class, you must apply to be appointed lead plaintiff and be selected by the Court. The lead plaintiff will direct the litigation and participate in important decisions including whether to accept a settlement for the class in the action. The lead plaintiff will be selected from among applicants claiming the largest loss from investment in the respective securities during the class periods. Members of the class will be represented by the lead plaintiff and counsel chosen by the lead plaintiff. No class has yet been certified in the above action. Appointment as Lead Plaintiff is not required to partake in any recovery.
Shareholders have until July 29, 2019 to request that the court appoint them lead plaintiff.
To receive more information, please fill out the form.